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Low coal supplies spark power cuts

Power cuts and rationing are hitting parts of central and northern China as winter coal supplies fall short of surging energy requirements due to extreme cold and transport disruptions.

China's State Grid, the government power provider, said in reports on its websites that recent winter storms had pushed demand higher while causing traffic disruptions that have hindered coal deliveries.

The areas reportedly worst affected in central China are Henan, Shanxi, Shaanxi, Chongqing and Hubei provinces.

China depends on coal for more than three-quarters of its electricity and also to fuel centralised winter heating systems in northern cities. Spates of unusually cold weather often strain supplies, with power rationing not uncommon.

About 620,000 households were left without power due to bad weather in Zhejiang, a province west of Shanghai, a report on the State Grid website said. It said power was being restored.

Some coal suppliers are reportedly holding back on shipments to power companies because contract prices for coal were below market prices, a chronic problem in China's state-dominated economy.

"There are troubles with resources but also with the market," Han Xiaoping, an official at energy information provider China Energy Net, said in a report posted on its website. "Costs are rising daily, but coal prices are strictly controlled, so suppliers cannot cover their costs."

In Henan, 40% of coal-fired power plants had fuel reserves equivalent to no more than three days of demand, according to a report on the State Grid's website. State-run China National Radio reported the province was imposing power cuts and rationing since it is unable to use about 40% of its power generating capacity.

Likewise, neighboring Hubei province was stopping some generators, citing an urgent need to conserve coal supplies, it said.

The entire region has just over two weeks worth of coal, with many power generators having stockpiles equivalent to less than three days worth of demand. Coal supplies also are being stretched by closures of smaller coal mines as part of a restructuring of the industry aimed at improving safety and increasing efficiency.

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